Memorandum by State Aid Unit, Scottish
Executive (ERF 27)
The Scottish GRO scheme seems to have been viewed
as innovative and favourable comments were made at a recent State
Aid and Regeneration Conference in London organised by DTLR.
Hopefully the following answers to your questions
will be helpful.
Does it apply across Scotland or is it limited
to the assisted areas?
The scheme is not limited to assisted areas.
It is however targeted for particular areas—single tenure
housing estates, older urban neighbourhoods and pressured market
areas. Communities Scotland (formerly Scottish Homes) decides
which areas are appropriate for support.
Are there any aid intensity ceilings and if not
how is the maximum grant calculated?
The following ceilings apply according to the
approval letter:
"Grants cannot exceed 40 per cent of project
cost in designated Social Inclusion Partnerships and Smaller Urban
Renewal Initiatives. In all other areas the grant will not exceed
33 per cent. The average level of aid is expected to amount to
approximately 23 per cent of project costs."
Is the grant for all owner occupation, owner occupied
affordable housing (eg key worker housing) and/or social housing
for rent?
The scheme is specifically for owner occupation,
and not social housing for rent. It aims to provide affordable
housing for designated client groups—primarily local residents
living in rented accommodation through lack of affordable housing
in the local area. After a fixed time any houses not sold to these
priority groups will be offered for sale on the open market. Key
workers are not a specific target for the scheme.
Can the grant take account of abnormal costs eg
site remediation or can it only take account of reductions in
value as a result of social end use?
All valuations of land or property will be undertaken
by an independent Chartered Surveyor, and the grants will fund
the difference between the cost of producing the property and
its market value, according to these independent valuations. This
could therefore take into account the costs of site preparation
such as remediation, decontamination and demolition.
(The approval letter does not go into any detail
on exactly what the eligible costs are—only that valuations
must be determined by a Chartered Surveyor. The notification to
the Committee does detail eligible costs, and includes the costs
of site preparation/remediation etc).
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